PocketLaw | Georgia Code | Prize Proceeds Subject to State Income Tax;

Prize Proceeds Subject to State Income Tax; Attachments, Garnishments, or Executions; Validation of Winning Tickets; Prohibited Purchases; Money-Dispensing Machines; Unclaimed Prize Money

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Proceeds of any lottery prize shall be subject to the Georgia state income tax.
Except as otherwise provided in Article 2 of this chapter, attachments, garnishments, or executions authorized and issued pursuant to law shall be withheld if timely served upon the corporation.This subsection shall not apply to a retailer.
The corporation shall adopt regulations, policies, and procedures to establish a system of verifying the validity of tickets or shares claimed to win prizes and to effect payment of such prizes, except that:
1. Except as provided in Code Section 50-27-24.1, no prize, any portion of a prize, or any right of any person to a prize awarded shall be assignable. Any prize or any portion of a prize remaining unpaid at the death of a prize winner shall be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the corporation along with a notarized letter of direction from the settlor and no written notice of revocation has been received by the corporation prior to the settlor's death. Following a settlor's death and prior to any payment to such a successor trustee, the corporation shall obtain from the trustee a written agreement to indemnify and hold the corporation harmless with respect to any claims that may be asserted against the corporation arising from payment to or through the trust. Notwithstanding any other provisions of this Code section, any person, pursuant to an appropriate judicial order, shall be paid the prize to which a winner is entitled;
2. No prize shall be paid arising from claimed tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the corporation within applicable deadlines; lacking in captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or not in compliance with such additional specific regulations and public or confidential validation and security tests of the corporation appropriate to the particular lottery game involved;
3. No particular prize in any lottery game shall be paid more than once, and in the event of a determination that more than one claimant is entitled to a particular prize, the sole remedy of such claimants is the award to each of them of an equal share in the prize; and
4. A holder of a winning cash ticket or share from a lottery game shall claim a cash prize within 180 days, or for a multistate or multisovereign lottery game within 180 days, after the drawing in which the cash prize was won.In any Georgia lottery game in which the player may determine instantly if he has won or lost, he shall claim a cash prize within 90 days, or for a multistate lottery game within 180 days, after the end of the lottery game.If a valid claim is not made for a cash prize within the applicable period, the cash prize shall constitute an unclaimed prize for purposes of this Code section.
No prize shall be paid upon a ticket or share purchased or sold in violation of this chapter.Any such prize shall constitute an unclaimed prize for purposes of this Code section.
The corporation is discharged of all liability upon payment of a prize.
No ticket or share shall be purchased by and no prize shall be paid to any member of the board of directors; any officer or employee of the corporation; or to any spouse, child, brother, sister, or parent residing as a member of the same household in the principal place of residence of any such person.No ticket or share shall be purchased by and no prize shall be paid to any officer, employee, agent, or subcontractor of any vendor or to any spouse, child, brother, sister, or parent residing as a member of the same household in the principal place of residence of any such person if such officer, employee, agent, or subcontractor has access to confidential information which may compromise the integrity of the lottery.
No lottery game utilizing an electronic or mechanical machine may use a machine which dispenses coins or currency.
Unclaimed prize money shall not constitute net lottery proceeds.A portion of unclaimed prize money, not to exceed $200,000.00 annually, shall be directed to the Department of Behavioral Health and Developmental Disabilities for the treatment of compulsive gambling disorder and educational programs related to such disorder. In addition, unclaimed prize money may be added to the pool from which future prizes are to be awarded or used for special prize promotions.

(Code 1981, §50-27-24, enacted by Ga. L. 1992, p. 3173, § 2; Ga. L. 1993, p. 1037, § 1; Ga. L. 2008, p. 370, § 2/HB 515; Ga. L. 2009, p. 453, § 3-2/HB 228.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1992, "indemnify" was substituted for "idemnify" in paragraph (c)(1), and "this Code section" was substituted for "Code Section 50-27-24" in paragraph (c)(4).

Administrative Rules and Regulations.

- Returns and collections, Official Compilation of the Rules and Regulations of the State of Georgia, Department of Revenue, Income Tax Division, Chapter 560-7-8.

JUDICIAL DECISIONS

Tickets produced in error.

- Applying O.C.G.A. § 50-27-24(c)(2), the law prohibits the Georgia Lottery Commission from paying a cash prize based on a printing error that happened to resemble the winning symbol. Georgia Lottery Corp. v. Sumner, 242 Ga. App. 758, 529 S.E.2d 925 (2000).

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